Just days after Little League International denounced Goffstown manager Jeff O'Connell's decision not to play his last substitute in the New England Regional semifinals last Friday in Bristol, Conn.,...

MANCHESTER — South Elm Street, which has already seen significant development with the opening of a new Market Basket and The Elliot at River's Edge, is now the area of opportunity in Manchester and will likely be transformed in the next five to 10 years.

That was the consensus of a panel discussion at the Greater Manchester Economic Development Summit on Wednesday, titled "Heading South." Two of the region's most prominent developers joined the deputy director of planning and the new executive director of InTown Manchester in painting a promising picture of what they called the Queen City's new frontier.

The tagline for the session might well have been, "Go south, and grow with the city."

With the popular grocery store and new health-care facility serving as bookends for the section of Elm Street in question, the future is bright, according to developer Dick Anagnost, who ought to know. He was involved in both The Elliot and Market Basket projects, and now has work underway at 179 and 200 Elm St.

The Spider-Bite at 179 Elm St. is more than doubling in size to accommodate other businesses owned by the same company, he said, while 200 Elm St., once a nightclub, is being gutted for as-yet-undetermined purposes. The foundation has been poured, and the framing will soon go up for a new state wine and liquor outlet Anagnost is building nearby.

"The portion of our downtown that has the most opportunity is South Elm," Anagnost said. "The parcels down there are bigger, the availability of parking is much better and, above all, the buildings don't hold a lot of historic significance, so their replacement is much easier."

The central section with its preponderance of historic buildings had been developed pretty much to its full potential, he said, while the north section has been fairly well-gentrified.

What's missing in the redevelopment equation is housing, which is where panelist Ron Dupont, president of Red Oak Apartment Homes, hopes to make a difference. His plan for a $10 million, mixed-use project on 1.75 acres spanning several parcels opposite the Market Basket building is the most ambitious proposal in the works. Preliminary plans call for a four-story building with retail or commercial space on the street level, and housing on the second, third and fourth floors, with 100 to 120 apartments or condos.

The demand for housing in the downtown is so great, Dupont said he could fill the units in six months.

"Downtown America is making a comeback," he said. "The only question in Manchester on South Elm is, will we do a good job."

Dupont's project is being held up in a dispute over his request before the Mayor and Board of Aldermen to discontinue several small street sections dividing parcels that need to be combined before construction can begin.

"I have some neighbors who are not happy with me," he said, "but I think we will continue on. We will do our best to get those streets discontinued. We're trying to clean up the deeds so I don't have any title issues after I build a $10 million building."

The most vocal objections have come from George and Phyllis Zioze, who own the building at 359-377 Elm St. In a Sept. 23 letter to the mayor and aldermen, they voiced their continued objection to the discontinuance.

"Simply put, Oak Leaf Homes has proposed discontinuance of public rights to use streets within a block that could be appropriate if it had acquired title to the entire block," wrote attorney Linda C. Connell of the McLane law firm on behalf of the Ziozes. "Oak Leaf Homes has expressed interest in purchasing the Zioze building, but has never made an offer."

Dupont said he would like to hear a starting price from the Ziozes first, adding, "I don't intend to get into a bidding war with myself."

Aldermen toured the site in the summer, but have so far declined to settle the matter by vote, urging both sides to work out an agreement.

The property dispute illustrates the hurdles that persist, even as the lure of South Elm intensifies. "It took 10 to 12 years to get the central core looking like it does today," said Pamela Goucher, deputy director of planning and zoning. "The south won't change overnight."dsolomon@unionleader.com